Bitcoin unexpectedly approached the $80,000 this week, triggering one of the largest short position liquidations ever recorded in the crypto market. According to CoinGlass, on August 20, approximately $3.07 billion in crypto short positions were liquidated as Bitcoin’s rally forced leveraged traders to close their positions. The squeeze occurred against the backdrop of strong inflows into spot Bitcoin ETFs and improving market sentiment following new signals from the US bond market.
A Record $3.07B Short Wipeout
Bitcoin’s sharp surge triggered a record wave of short liquidations across the crypto market. According to data from CoinGlass, crypto short liquidations reached $3.07 billion on August 20, the highest single-day level the platform has ever recorded for short positions.
$3.07B short liquidations. Source: CoinGlass
Short positions are liquidated when prices rise against expectations and losses exceed margin requirements. Automated exchanges closing these orders can generate additional short-term buying pressure, especially when many traders are swept out of the market in a brief period.
Liquidation pressure began rising sharply on August 19, when Bitcoin broke above $68,000. CoinGlass data at the time recorded approximately $1.57 billion in total 24-hour liquidations, with shorts accounting for about $1.41 billion. Moving into August 20, as buying pressure spread to Ethereum and major altcoins, total 24-hour liquidations rose to about $2.71 billion, with shorts accounting for roughly $2.47 billion.
Bitcoin’s Push Toward $80K
Bitcoin had been range-bound between $62,000 and $65,000 since early June before breaking out strongly this week. The rally pushed prices near $80,000, reaching a short-term peak of around $79,461, before cooling off to around $77,000.
BTC Price Chart (4h). Source: TradingView
This surge marked the first time Bitcoin returned to its highest price levels in months, while sending positive sentiment across the broader crypto market. Ethereum temporarily crossed $2,300 before cooling down, while Solana, Dogecoin, and BNB also gained alongside the recovery of major assets. Nonetheless, Bitcoin remained the focal point as the primary driver of liquidity and where the price breakout was most pronounced.
ETF Flows Point to Real Demand
Inflows into spot Bitcoin ETFs surged alongside Bitcoin’s breakout, indicating that market buying pressure did not stem solely from forced short closures. According to Farside Investors, US spot Bitcoin ETFs recorded a continuous streak of inflows during the week of August 17–21, totaling approximately $1.92 billion in net inflows across five sessions.
Inflows peaked mid-week, with funds pulling in a net $517.2 million on August 19 and $606.3 million on August 20, marking the highest daily figures in Farside’s August dataset. On August 21, the ETF group recorded an additional $307.5 million in inflows, showing that buying pressure persisted even after Bitcoin broke out of its consolidation range.
Bitcoin ETF Flow. Source: Farside Investors
BlackRock’s IBIT stood out as the leading performer during this streak. On August 20 alone, IBIT absorbed approximately $503 million, accounting for the vast majority of the $606.3 million total net inflow across all spot Bitcoin ETFs. This data indicates that the momentum was not driven solely by derivatives traders being forced out of positions, but was also backed by spot demand through traditional investment vehicles.
Treasury Buybacks Add Macro Fuel
On August 19, the US Department of the Treasury announced an increase in the scale of buybacks for select long-term bonds, raising buyback operations for the 10-to-30-year maturity bucket to at least $4 billion per session, up from the previously planned level of around $2 billion. According to the Treasury announcement, this change applies from September 9 to November 4, amid long-term US yields hovering near multi-year highs.
The buyback program is designed to support liquidity in the long-term bond market, but the timing of the announcement turned it into an important macroeconomic signal for risk assets. Long-term yields had previously surged as investors worried about inflation, public debt, and the supply of US government bond issuances.
For Bitcoin, this news added an extra layer of support beyond the ETF and short squeeze narrative. During periods of heightened bond market volatility, investors tend to focus more on limited-supply assets like gold and Bitcoin, particularly when confidence in USD-denominated assets is tested.
Can the Breakout Hold?
After approaching $80,000, Bitcoin cooled off to around $77,000, leaving the market to monitor whether buying pressure remains strong enough now that the wave of short liquidations has passed its peak. The rally has retained most of its gains relative to the previous consolidation zone, but forced buying from short liquidations rarely persists indefinitely once leveraged positions have been thoroughly flushed out.
The key factor is whether spot inflows can continue to offset profit-taking pressure following the sharp volatility. ETF inflows remained positive on August 21, but the derivatives market also warrants close attention, as funding rates, open interest, and liquidations can reverse rapidly after a major squeeze.
With $3.07 billion in shorts wiped out in a single day and roughly $1.92 billion in spot Bitcoin ETF inflows over the week of August 17–21, Bitcoin logged one of its strongest rallies in months. The $80,000 mark now serves as a key test of whether price momentum can transition from forced buying to more sustainable demand.
